"Yet some American politicians are doing their best to block it, out of fear of being swamped by immigrants."
...um yeah, ok.
"They could hardly be more wrong. Fewer Mexicans now move to the United States than come back south."
Any article about the Mexican border that doesn't mention Guatemalans or Salvadorans (at the very least!) is missing the point entirely.
...??????
Why would the correspondent assume that all immigrants crossing the Mexican border are Mexican? Especially the illegals?
Let me put it this way, if an English speaking person tells me they are Mexican, I pretty much assume that they don’t understand any Spanish.

What does Guatemala or Salvador have anything to do? Their economy is not as entangled as the Mexican
and American one. The point of this whole article is how Mexico's economy is growing thanks to an increased share of the workshop market to the US. Mexico is rising because of its cheap labor and increased technical skill vs China that's becoming more expensive and risky (intellectual property)

Guatemala and Salvador have many people in the US, but they are not the point of this article because their economy is not growing as fast.

No doubt Mexico as an alternative to increasing wages in China and fluctuating oil prices, will attract manufacturers focused exclusively on the U.S. market, but, what can Mexico offer beyond geographic proximity? China is well ahead of all of LatAm in a wide range of areas to include a much larger and better disciplined/trained workforce, infrastructure support, more logistics clusters, and a vast amount of FDI specifically supporting manufacturing, trade and development.

Thats interesting, and it would be more interesting if we knew what percentage of the working population is engaged directly in the production of manufactured goods (not assembly) for export.

China produces a wider range of goods for export, to more destinations, thats what matters at this stage. Mexico should try to attract the broadest possible range of firms, not just those seeking to position themselves geographically closer to the U.S. market.

Another concern is Mexico's ability to provide services beyond the “Golden Triangle.” The country must provide fresh opportunities for manufacturers, by way of specialization of services, enhancement of global connectivity beyond the current limited offering, to include port services attractive enough to draw some of the Long Beach/Panama container traffic going southbound.

In the shorterm (main calm, remain seated) Mexico should allow USCBP inspectors in-country, in order to enhance the already advantageous transit time they currently enjoy to northbound destinations.

Now you wouldn't ask a question without already having the answer, would you?

Take a look at the total value of exports based on customs entries, the number of primary export destinations for each country and the number of TEUs, puts China well ahead of most of the western hemisphere.

Even WalMart is a good indicator for retail level goods within the U.S.

Oh please. "What can Mexico offer beyond proximity" As in real state, in international trade (and GEOpolitics), the three most important factors are: location, location and... location.
And on top of that: a huge local market, free trade agreements with most of the fastest growing markets in Spanish speaking, and everyday more and more integrated Latin America and last but not least, cheaper labor than China. Mexicans themselves have not been able to even spot these opportunities, and therefore have not been able to even start selling them, and if they do not sell it, nobody will buy it. But wait until the day Chinese companies see it. And dear Mexican friends, just admit it, it is these factors that make Mexico attractive. For the moment, Mexico, as the rest of Latin America, cannot match Korea, Taiwan, China, Singapore in local technology champions. Other than CEMEX (My sombrero off!) the best Mexico can offer is Mexicans subsidizing Carlos Slim's investment abroad through the rent he sucks from every mortal Mexican from his monopoly n telecommunications. And in this regard, China is far ahead. Watch up Carlitos, China Mobile may be coming and, finally help develop Mexico's telecommunications sector. Wei ni hao! The Chinese are no the sitting duck Iusacell or Movistar are.

As for your assessment of the three most important factors in international trade being “Location, location and … location.”

I can only say that, to a goodly degree, it seems as if global transportation has nullified that.

On a serious note.
I think Mexico has indeed been able to spot many opportunities; like all countries, they just haven’t been able to pull it all together, yet.

Also, “Cheap labor” in itself will probably not be enough of a magnet to attract and expand a wider range of foreign firms. While Mexico can provide cheap labor, (Is it $3 per hour?) it can also provide goods and services beyond the “Cheap labor” level, notice the trade transactions with the golden triangle. Mexico has to enhance its positives and spread the wealth across its population, no overnight task.

A bit unfair to compare Mexico's economic strength to South Korea using purely GDP. The high-value exports coming from Mexico (as you point out, things like flat-screen TVs and BlackBerries) distort that number. Mexican income per capita is rougly half of Korea's, and a more comparable Asian country is Malaysia. The sector composition of its economy, etc. are all more similar to Mexico than Korea.

Glad to hear Mexico's doing well. Now all the best and brightest Mexicans a.k.a. all those who can run, jump and swim who have been held against their will in the US (forcing them to keep speaking Spanish lest they should forget the beloved motherland) can go back to their great country that is Mexico, take back the country from the corrupt and the criminals.

Roads are also a barrier to trade. You need efficient logistics in order to boost trade and productivity. Mexicans are forced to take some of the world's ugliest roads (if there are any available) to transport goods internally duty free; otherwise, they can spend a fortune on the infamous "casetas", which often charge the equivalent of $60 Cdn for a 200-km trip. Until Mexicans can enact effective internal logistical infrastructures, I doubt that that they will ever see their nation rise to its true potential, that and the fact that an indecently large proportion of its GDP is held by a select few (Carlos Slim - 8% for connections, not intelligence).

The Mexican government has invested heavily in transport infrastructure in the recent years. Having ample experience in logistics consulting, I can tell you that the roads are more than adequate. You can find more info here: http://www.infraestructura.gob.mx

As to your comment that "an indecently large proportion of its GDP is held by a select few", it shows that you have a limited understanding of economics. GDP is not "held", it is produced. And wealth cannot be prevented from circulating. The only way wealth can be generated in an economy, is by producing a product or service and selling it. If Slim is so rich, is because his companies have produced services who have benefited millions, and we are willing to pay for those services. Granted, you can argue that the services are not awesome, but that´s a different discussion. The main point is that once wealth is generated, it does not stay still. Rather, it circulates; money never, ever stays still. Slim´s companies employ hundreds of thousands of people, and buy products from tens of thousands of other companies. Even the luxury items Slims buys with his money produce wealth for others: the car manufacturers, the real estate developers, the jet builders, etc.

Now, could Slim´s telecom businesses be more efficient, making the money move even faster? Absolutely. But if you believe that people are poor because Slim is rich, you are very much mistaken. The real world economy is not a game of Monopoly, with a limited number of funny money bills. In the real world, wealth is created out of capital, labor, and materials, and that wealth benefits us all.

Come on roads are better, but they are not adequate, it takes 4 hours to get from Guadalajara to pto Vallarta, even tho it's 196 km away (in a straight line), the public roads are so bad that u have to take the private road and pay 400 pesos to get there and let's not talk about the south which is beign ignored as ever, most of the roads are good in central mexico and the roads going to the states and a few ports, but apart from that it's generally not adequate, and trains are even worse, i mean there's no train service in central mexico which makes sense cuz most mexicans live there. Sure roads are getting better, but they are not good by international standards, and the good ones are the only comercially viable, that's one of the reasons why the narcos are so succesfull and the rural population is considerably poorer and less educated.

In 2050 Mexico will be the fifth largest economy in the world and the US will be the third with 1,875 miles of common border. Mexico has to keep up its pace and forget about being mentioned or acknowledged for anything. It is not necessary, neither desirable. Let China be the US focus. This will give Mexico room. In the future, economic blocks will turn out to be more important and cooperation -whatsoever the public rhetoric is- will shape the world.

This comment lacks any understanding of historical and economic context. As much as I would like it to be true, it emulates the commonly misstated belief that "the territory of the southern US should be part of Mexico because at some point in time it was".

By year 2050, the Mexican-AMERICAN population will probably be large enough to demand separation. However, these people will still be American citizens, who feel related to the US culture and values.

Also, these would be the children of immigrants that consciously decided leave Mexico. Why would they then want to annex the territory to Mexico? I doubt that their forefathers, while crossing the Rio Bravo, had in their mind any secret, patriotic political agenda related to bringing territories back to Mexico.

The southern US states were part of Mexico only for roughly 40 years (1821 to 1860's if I am not mistaken). These territories have been part of the US for around 150 years. Why insist that these territories are more Mexican than American?

I have to agree with this very smart assessment. Mexico already has a hugely bad name in Anglo circles - even in the Economist they could come up with no better idea than some big sombreros - so better to go unnoticed and unmolested. Slowly and methodically gather economic strength while possibly pursuing a quiet return to sovereignty.

I have to agree with this very smart assessment. Mexico already has a hugely bad name in Anglo circles - even in the Economist they could come up with no better idea than some big sombreros - so better to go unnoticed and unmolested. Slowly and methodically gather economic strength while possibly pursuing a quiet return to sovereignty.

First of all along with Mexico there are seven other Latin American countries who don't think they get enough attention from mommy (the USA obviously being the mommy in this metaphor). Then consider myriad nations in the middle east, Africa seeking parental indulgence, or throwing tantrums when they don't get it. Secondly, the USA is the world's leader in international development and humanitarian assistance.

The only outdated viewpoint is the Economist trying to dump all of the world's problem on the United States. Please stop casting the USA as the savior to every countries woes or policeman to every transgression.

Only Mexico and Canada share a border with the US. There is not a single country in the Middle East or Africa that has a higher long term strategic importance than Mexico, given its Emerging Country status and large population. Hopefully Americans will finally start to realize this.

I don't mind. Sort of like a New Jersey guy working as a cop in New York. Anything to expedite my cross border traffic. If only it was like travelling between France and Germany at 70mph. And we even speak the same language!(well almost)

Yeah but we still dont forgive you guys for stopping us legalizing weed, forcing us into invading Afghanistan, getting mad at us for not invading iraq, and forcing us to let your war criminals visit our country without fear of arrest :(
We consider ourselves a sovereign country while america only considers itself a sovereign country and doesnt respect anyone else. :(

I get you,Bush got angry with us for not supporting him at the UN to get permission to invade Iraq so he let us know there would be no way of an inmigration reform, we weren´t very hopeful to get it in the first place but that still was rude IMO :(

Most people do not have a truly historical perspective of how countries have evolved. Rather, they focus on the span of time comprised of the moment they started reading newspapers and paying attention a few years or decades ago, to the present. Very few pick up a book and read about the 200 year economic history of a country. Being one of those few that have in fact read (and written) books on the economic history of Mexico, I can assure you that Mexico has been rising for quite some time. Few people know that Mexico grew at the rate China is growing right now, but back in the 60s and 70s; it was even called the Mexican Miracle, and it was all over the news back then (except there was no Internet and therefore there was less hype).

Mexico barely survived the 19th century, was forged in fire at the start of the 20th century, and was consolidated as a political entity by the 70 year PRI rule. Yes, we had sever economic crises in the 80s and 90s, but in the great scheme of things, those will be blips on the graph in a thousand years.

Mexico is becoming a leading nation, migrating from the periphery to the core, thanks to the daily focus and persistence of millions of working Mexicans. Naysayers, clueless pundits, media that quote each other in circles, vociferous left wingers, crazy right wingers and Pentagon eggheads without field experience are of no consequence.

Are these the kind of books anyone would care to publish? Title?
My grandfather used to say that a well-educated man must be humble because he does not feel the need prove himself. I am of the opinion that humility should not be an obligation. If you don't want too be humble - then don't. You must however be prepared for the scrutiny and criticism of those souls less furtunate and educated than you. So, title? Can these books be found online?

Are you willing to pick lettuces? Because most Americans are not. If the illegal farm workers leave the US, Americans will not take their places; rather, American farmers will go broke, and then the US would have to import the produce from Mexico anyways.

I have dual nationality (US-Mexico) and live in Mexico. I followed your advice and came back looking for better opportunities down here. The business that I started in 2001 from zero will invoice over 80 million USD and next year I'm forecasting going over 100 million. My son goes to Reed College and grew up in Florida. He is considering moving to Mexico after finishing college since job opportunities for college graduates in the US are scarce. By the way I wasn't your lettuce picker or your gardener, I was part of the "1 %" (Lawyer with and MBA from a top school in the US) and still thought that had better chances here in Mexico and luckily for me my idea paid out.

I hope that more Mexican-Americans follow my path and I'm sure that they will as the article points out.

With all due respect, you clearly do not understand economics. If wages where to rise for lettuce pickers, the price of American lettuce would go up, and stores would rather buy imported lettuce. As simple as that.

But I think you simplify the problem. You stop at the price of lettuce will go up so store will buy lettuce from Mexico purely based on labor cost. The problem is far way more complex than that. One could argue that even if the price of lettuce goes up, it would benefit the Mexicans. In return, the Mexicans would have more money to spend on our high tech products. As a result, we will employ more employees here in US. So when you stop short at just the price of lettuce, you gave the readers the impression that it is the ONLY outcome and hence we have to accept the fact that illegal immigrants should stay here for good.

Mexico's and the USA's economies are tangled, whether you like it or not.

Do you realize how many jobs on both sides of the border depend on the trade between these two countries?

It would be more beneficial for both countries if people like you spent less time whining about the allegedly job–stealing–dangerous–criminals–evil–tax–evaders–son–of–a–gun illegal immigrants, and more time on finding ways to increase trade between these two great nations.

Face it, deal with it and freaking accept it: illegal immigrants are not a real issue for the US. They are just a scapegoat for your troubles. It doesn't matter who you blame but as long as you point the finger to others, the US will continue to be deeply divided country in almost every important issue.

As to your point, you can go ahead and buy Mexican lettuces to try to reduce illegal work migration. But you are doomed to fail; most people don´t think about that when they go buy groceries. Lettuce produced in the US by illegal workers will likely always be cheaper, just because of the logistics costs.

Most weapons in Mexican drug gangs come from Mexican army or police deserters, and were imported legally from China, Russia and the US.

Pot has been, for all intents and purposes, legal for personal use in Cali, Oregon and WA for years, but crime is still around drugs. Legalizing and taxing will just increase the price and still encourage crime. Liquor is legal, but moonshining is rampant in Appalachia.

I am an British exchange student, studying in Mexico's leading private university....in relation to USA-Mexico relations, I read the situation as USA is a colonialist using Mexico's cheap labour, agriculture etc to keep Americans at home living a comfortable life at lower cost.....graduates aspire to work for Anglo-american companies, cinemas principally show Hollywood blockbusters i.e. the youth culture is americanised.

The outcome? Mexico is on the rise, and its growth will mean it will surpass G8 countries (maybe the UK within a couple of decades)but surpassing USA seems an unsurmontable challenge, in many areas of competition....so ingrained is the supremacy of USA in the minds of the Mexicans.

Also, I think Mexico needs to work on 'brand Mexico', finding other trade partners so it is not dependent on the USA lifeline. Mexico does not have its own voice in global politcs. Aside from the President, there are no recognisable figureheads for foreigners to recognise and associate with a Mexican identity. Before coming to Mexico, I did not know much about the country: what are Mexico's global brands? who's who?

Mexico's profile is not as high as others but not invisible either. In comparison let's compare with G8 Canada. Is there a Canadian business leader with as high a profile as Helu? Is Bell Canada more well known internationally than Cemex?

Different courses for different horses...Canada does not have a worldwide reputation for guns, drugs and dirty money. In fact its discreetly famous for safe banking, a good standard of life and great universities. 'Brand Canada' is grand.

Different courses for different horses...Canada does not have a worldwide reputation for guns, drugs and dirty money. In fact its discreetly famous for safe banking, a good standard of life and great universities. 'Brand Canada' is grand.

There are a number of major Mexican companies which are global. Cemex for instance bought RMC in the UK and you can see Cemex's logo in all sorts of places in the UK. Like most emerging economies Mexico's companies are more present than well known.
The number of Mexican companies is usually in the top five by nationality when listings are produced of major emerging market companies. So there is progress in globalisation and growth by Mexican companies, albeit there is some way to go.

@GoGo. Is Slim the best you have from Mexico to show. Oh come on. A fortune make on exploiting rent taken from his ill-gotten monopoly on telcom.
Cemex on the other side: Respect!!!
But there is not much else to show, specially not in comparisson to Asian economies.

I had a choice between Spain, Mexico, Chile and Argentina. Spain's economic problems and high youth unemployment signalled to me the country was not a good place to learn about business opportunity. Argentina's Cristina Fernández de Kirchner was making noises over the Falkland Islands so I was worried about how I would be received as a Brit. Chile was my second choice, Mexico won ironically because of its close ties to USA meaning future opportunities to work and study in USA and because my university, ITESM is leading the LatAm region in engineering and IT, it was the first in the region with an internet connection.

"Also, I think Mexico needs to work on 'brand Mexico'"
I am also a Brit living in Mexico working as a Brand consultant and strategy coach. I totally agree that Mexico needs to work on "Brand Mexico". Following a generally positive outlook from the Economist, the majority of comments here are negative and inaccurate.
But if that is the perception of readers, the challenge for Mexico is to change that perception. So hats off to the Economist for making a start!
Perhaps I should add that the majority opinion of the business and marketing community I come into contact with is cautiously optimistic. But very aware of the challenges ahead; very aware that significant reforms will be required and very aware of the power of the vested interests (commercial and political) that are arrayed against those necessary reforms.
Peña Ñeto, the new president, is going to face an up hill struggle to get the Mexican economy growing at 6%.

There is definitely a huge need to improve "Brand Mexico" the problem I perceive with Mexico is that for most intents and purposes we only have 1 major customer, the USA, and Brand Mexico in the Eyes of the USA can not be improved. A few years ago I was going to purchase a Ford Vehicle.. And looking thru the online reviews kept seeing people saying don't buy this car because its built in Mexico and the implication there was clearly "this is a low quality vehicle" It turns out that the Ford Factory in Hermosillo Mexico has been Ford's highest quality factory worldwide for 7 years running.. When Jingoism, Xenophobia and pure ignorance are in the mix, it is a very hard thing to overcome.

Non-sense.... before you go back to Britain, try and get closer to the border up north (e.g., Monterrey). Most people in Northern Mexico would love to become Americans. This is not result of colonialism. It reflects cultural and social ties that dates back many decades.

In my opinion, the US should offer Mexico and other countries in Latin America (e.g., Panama) a path to become part of the USA. Most of the citizens of this countries would love the opportunity of becoming Americans. It would provide us with tremendous enconomic growth due to the sheer expansion of the economy and it would offer them the opportunity to be part of a country that offers a much more stable environment. Just ask around... if offered the choice, most Mexicans in the north would vote for annexation with the US.

As a Mexican living abroad.... I'd just return to Mexico IF the government is capable of bringing security and a sense of safety to the country.... All Latin American governments have shown to be incompetent and non capable of giving to the typical citizen security to go out and work without being afraid of goig back home without fearing for his/her life....
- When the crime rate becomes as stable as it was 60 years ago, then MAYBE I'd go back to Latin America...what happens there is as evil as what's going on in Syria or Gaza !

60 years ago? Do you mean when murder rates were about double the current level?http://www.mexicomaxico.org/Voto/Homicidios100M.htm
I don't deny the current situation is worryingly bad, you can't go out before thinking, do I look like a narco? Will people think I'm rich and target me? Am I going to a dangerous part of town? but it's not historically bad, and it's getting better.

As a Mexican living abroad.... I'd just return to Mexico IF the government is capable of bringing security and a sense of safety to the country.... All Latin American governments have shown to be incompetent and non capable of giving to the typical citizen security to go out and work without being afraid of goig back home without fearing for his/her life....
- When the crime rate becomes as stable as it was 60 years ago, then MAYBE I'd go back to Latin America...what happens there is as evil as what's going on in Syria or Gaza !

The problem is that violence is located around SOME north and south municipalities because of the drugtrade routes in conflict also, ppl often forget how really BIG is Mexico, Mexico is bigger than France, Germany, Spain and Portugal put together actually but is confused as if it were a very small nation, so naturaly when they see news of the contry they automatically think we are in a sort of "civil war" and really, that is pushing it out of reality.

The great majority of the country has been ok, just getting on with their lives. As with many countries, there are parts with higter crime than others, even inside cities so there is just a case of Knowing your surroundings, really. I live in little city in central Mexico.

IF you think you are better away and getting on with your live then is ok to stay away IMO, everyone should be when they feel fine and at peace.

Matthew i really dont know if you can compare it to whats going on in Gaza at the moment. To be objective, i dont know whats going on in Mexico too, but currently the situation in Gaza and Syria is extreme